Friday, July 20, 2012

Court boots West Vancouver pair from luxury home

Occupants of $4.5M waterfront house deemed to be there illegally

A West Vancouver couple have been kicked out of a multi-million dollar home they were living in after a court ruled they have no legal right to occupy the land.

A B.C. Supreme Court justice ordered Alex and Niomie Barta off the secluded waterfront property after ruling they had never completed a property deal to buy the land. The Bartas lived in the home at 8555 Lawrence Way, north of Horseshoe Bay, for two and a half years before being told to leave.

The deal to purchase the house and nearly three acres of property was supposed to be finalized in the fall of 2008 - just as the global economic crisis hit.

But instead of completing it for $4.8 million, the Bartas took advantage of a friendship with the elderly property owner, John Palkovics, to try to buy the land for far less than it was worth, Justice Grant Burnyeat ruled. When that didn't work, the Bartas moved into the house, but reneged on the terms of the sale.

In court, Alex Barta argued that Palkovics had made a verbal deal to sell the property to the couple for $4.2 million, and that Palkovics would give the Bartas ten years to pay him. But the judge rejected that, saying while discussions took place, no binding deal was ever agreed to.

Recently, the couple asked a B.C. Court of Appeal judge to allow them to keep living on the acreage north of Horseshoe Bay until their appeal of the case was heard. But Justice Daphne Smith rejected their request.

The saga of a real estate deal gone wrong began after Palkovics inherited the property in 2007. In 2008, Palkovics talked to realtors and one potential purchaser about selling the property for $4.5 million. But in July that year, the Bartas - who had come to know Palkovics - offered to buy it for $4.8 million, and a contract was drawn up. They also paid a $300,000 deposit.

Three months later - after the financial crisis hit - Barta phoned Palkovics to say he had lost a lot of money in the stock market and was having trouble getting financing. He asked for extra time to complete the sale.

In November 2008, a second contract was signed with a closing date of Aug. 30, 2009. Afterwards, according to court documents, the Bartas presented Palkovics with an "addendum" allowing them to pay in installments over five years. The couple asked him to sign right away without talking to a lawyer or "they would be unable to acquire the lands and would be emotionally devastated." Palkovics said he signed the additional form under stress.

They agreed that the Bartas would take possession of the house in November 2009.

But in July 2009, before the deal completed, Barta phoned Palkovics and in a surreptitiously recorded conversation, tried to get him to change the terms of the deal, allowing the couple to buy the property for $4.2 million over ten years, with a reduced payment up front. Palkovics discussed it with his lawyer, and eventually did not go ahead with it.

The Bartas insisted the deal was binding, however, and only paid Palkovics $100,000 in September 2009 - a fraction of the $500,000 due under the signed contract. The couple moved into the house on Nov. 1, 2009, but paid no further money.

Palkovics told the judge that throughout their dealings, when the Bartas didn't get what they wanted, they became extremely upset and appealed to his "friendship" "kindness" and "generosity."

"They would accuse me of being mean-spirited and unreasonable, and they would become emotional and very upset with me," he testified.

Palkovics said he handed over the keys to the property even though the couple hadn't paid what was written in the contract because "Mrs. Barta was crying hysterically and Mr. Barta accused me of harming her" and "being a bad person."

The judge, however, didn't see it that way, writing, "I am satisfied that the defendants have attempted to take advantage of the friendship they developed with a 79-year-old man in order to negotiate the purchase of the property at a price considerably less than its appraised value."

The judge also took a dim view of the Bartas' trying to trap Palkovics into a better deal for themselves and by the couple claiming Palkovics had given them the furniture in the house - which the judge ruled wasn't true.

Burnyeat ruled Palkovics could keep the $400,000 paid by the Bartas. If the couple hadn't occupied the house, Palkovics could have rented the property out for $145,000, the judge ruled.

The judge added that Palkovics is retired and needs the money from the sale of the property - currently estimated at about $5 million - to pay for his living expenses.

The Bartas are appealing the decision, seeking damages and a return of their deposit.